(Stock split) Reconsider the problem faced by Templeton Care Facilities, Inc from Study Problem. If the firm’s board of directors decided to use a stock split rather than a stock dividend, how many new shares should the firm issue for each outstand ing share?
Problem
(Stock dividend) Templeton Care Facilities, Inc. is contemplating a stock dividend. The firm’s stock price had risen over the last three years and was trading al $150 per share. The firm’s board of directors felt that the trading range should be around $.50 to $100. so they wanted to initiate a stock dividend that, other things remaining the same, woukl result in a $50 share price. What should the stock dividend be so as Id result in the desired change in the firm's stock price?
Test—CI connection In exercise 1, explain how the result of the 99% confidence interval in part b corresponds to the result of the decision using significance level 0.01 in part c.
Exercise 1
Time spent on Internet In 2006, the General Social Survey asked about the number of hours a week spent on the World Wide Web (variable denoted WWWTIME). Some results are as follows:
Group | N | Mean | StDev | SE Mean |
Male | 1196 | 6.2 | 9.9 | 0.285 |
Female | 1569 | 4.9 | 8.6 | 0.216 |
Difference = mu(Male) − mu(Female) | ||||
Estimate for difference: 1.3 | ||||
99% CI for difference: (0.4. 2.2) | ||||
T-Test of difference = 0 (vs not =): | ||||
T-value = 3.62 P-value = 0.000 |
a. Identify the response variable and explanatory variable. Indicate whether each variable is quantitative or categorical.
b. Report and interpret the 99% confidence interval shown for the difference between the population means for males and females.
c. Report and interpret the steps of the significance test comparing the two population means. Make a decision, using significance level 0.01.
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